Step 1: See Your ultimate goal
Before you consolidate otherwise refinance, it is very important getting clear regarding the wants. Are you hunting for down interest levels or how would you like so you can simplify brand new repayment techniques? Or could you be wishing to consolidate numerous money with the you to definitely the fresh new loan you have one percentage as opposed to multiple?
Refinancing may boost some or all terms of your mortgage and relieve their monthly payment. Like, if you extend the length of the loan to attenuate your own monthly payment, you may also pay a whole lot more full desire.
When you yourself have federal student loans, you might consolidate them from Government Direct Consolidation Loan Program offered by the federal government. The applying lets borrowers to combine any one of its a good federal student education loans to your a single the mortgage. The repaired speed lies in the fresh weighted average interest rate of the finance being consolidated, circular to another you to-eighth of a single %, and cannot surpass 8.25 percent.
Although not, there’s absolutely no government refinancing. This is because Congress set the interest rate to own government college loans, and most of those rates is actually repaired by law, no matter how strong your own borrowing from the bank or income gets immediately following graduation.